S.I. No. 221/2002 - European Communities (Electronic Money) Regulations 2002

• (b) Where in accordance with paragraph 7 of Article 22 of the Codified Directive the European Commission decides that the measures in question should be amended, suspended or terminated, the Bank shall comply with that direction and shall, where appropriate, apply to the Court in a summary manner for an order amending, suspending or terminating those measures accordingly.

• (5) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interest of justice, that it is desirable, the whole or any part of proceedings before it under this Regulations may be heard otherwise than in public.

Part 8 Offences and penalties

Offences

42.

Provision of false information, etc.

43.

Offences by bodies corporate

44.

• (a) in the case of a body corporate, was a director, manager, secretary or other officer of the body corporate,

• (b) in the case of a limited partnership within the meaning of the Limited Partnership Act 1907, was a director or member of the partnership, or

• (c) in the case of any other partnership, was a partner,

or a person purporting to act in any such capacity, the person referred to at (a), (b) or (c), as well as the body corporate, limited partnership within the meaning of the Limited Partnership Act 1907, or other partnership, as the case may be, is guilty of an offence and is liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.

Continuation of contravention of Regulations

45.

Prosecution by Bank

46.

Explanatory Note

(This note is not part of the Instrument and does not purport to be a legal interpretation)

The purpose of these Regulations is to give effect to Directive 2000/28/EC of the European Parliament and of the Council of 18 September 2000, relating to the taking up and pursuit of the business of credit institutions, and to give effect to Directive 2000/46/EC of the European Parliament and of the Council of 18 September 2000, on the taking up, pursuit of and prudential supervision of the business of electronic money institutions.

These Regulations introduce a regulatory regime for entities issuing e-money in the State and introduce the concept of a single European passport for these institutions. The regime is based on the existing prudential supervisory regime applicable to credit institutions, but differs in that it responds to the specific risks associated with the issuance of e-money.

The Regulations provide a definition of “e-money” and set out the requirements, in terms of capital adequacy and operations, for e-money issuers. “E-money” can be considered as an electronic surrogate for coins and banknotes, which is stored on an electronic device such as a chip card or computer memory and which is generally intended for the purpose of effecting electronic payments of limited amounts -these payments to be accepted by undertakings other than the institution which issued the e-money. The Regulations also limit the business activities of electronic money institutions, in restricting their activities to services which are closely related to the administration of e-money.

An electronic money institution is not permitted to grant any form of credit or to issue e-money at a discount. The Regulations also provide that a sum of money which is immediately exchanged for e-money shall not be treated as if it were a “repayable fund” or “deposit” for the purposes of the Central Bank Acts 1942 to 1998. To protect the consumer and to ensure bearer confidence, the consumer at all times maintains the right to exchange his or her e-money back into coins and banknotes of the same amount (redeemability at par value). In the interests of consumer protection and with a view to limiting the scope for money laundering by use of the whole e-money scheme, the Regulations limit the value of a single “e-purse” to €5000.

Regulation 19 provides a limited waiver for certain persons, whose operations are on a restricted scale, [e.g. (i) where the amount of outstanding liabilities in relation to the issued e-money is limited to a maximum of €6 million or (ii) the e-money scheme in question is limited to a local area such as a university campus, or to a close business relationship]. Such persons may, at the discretion of the Central Bank of Ireland, be excluded from the full scope of these Regulation. However, certain restrictions are imposed on electronic money institutions which benefit from this waiver -the maximum value of the “e-purse” issued by such persons is set at €150 and such electronic money institutions will not enjoy mutual recognition status as between the Member States.

Part 4 of the Regulations sets out the financial requirements, including requirements relating to initial capital and investment of its funds, applicable to an issuer of e-money.

Part 7 of the Regulations provides that persons authorised in another Member State, to issue e-money in that State, are entitled to issue e-money in this State and that persons authorised in this State, to issue e-money in this State, may also do so in another Member State, i.e. there is mutual recognition with home responsibility for supervision.

Footnotes